Three Infliximab bids ranging from €68.89 to €405.22 — and your motivation reads 'two are generics'? That's a 'gross error' that brings the award down
The Council of State suspends the award to Sandoz of an Infliximab framework agreement for the CHR de la Citadelle hospital because the contracting authority wrongly classified the two cheapest offers as 'generics' while they were in fact 'biosimilars' — a substantive distinction that should have underpinned the price justification of an 80% price gap.
What happened?
The CHR de la Citadelle, a Liège-based intercommunale, launched a European open procedure in February 2020 for the supply of Infliximab 100mg (a biotechnological drug used for rheumatic conditions) over four years — a framework agreement between €450,000 and €800,000 ex VAT, with price as sole award criterion. Three bidders submitted: - BIOGEN BELGIUM: €97.16 per unit (incl. VAT) - MSD BELGIUM: €405.22 (the 'original' Remicade) - SANDOZ: €68.89 The spread was striking — the most expensive bid was nearly six times the cheapest. On 18 March 2020 the contracting authority requested a 'justification [for] abnormal price' from each bidder, expressly referring to Article 36 of the Royal Decree of 18 April 2017 (price justification for apparently abnormal prices). The three responded 'succinctly'. In the evaluation report, the entire assessment of those answers was summarised in two sentences: 'The 3 justified their prices (two of them are generic products, the 3rd is the original). Their justifications are accepted'. On 24 April 2020 the executive bureau awarded the contract to Sandoz at €64.99 per unit (ex VAT). MSD received the reasoned decision on 17 June 2020 (an earlier email of 15 June went to a wrong address) and filed an extreme-urgency suspension request on 2 July. The Council of State first establishes its jurisdiction: the CHR de la Citadelle is an intercommunale and therefore a public-law legal entity, even when set up as a cooperative. As such it is an administrative authority within Article 14 § 1 of the Council of State Act. The core issue follows. The contracting authority argued ex post that it had applied not Article 36 (abnormal price) but Article 35 (general price examination) — an argument first raised at the hearing. The file says otherwise: the three letters of 18 March 2020 expressly cite Article 36 § 2 'on the control of apparently abnormal prices', and the evaluation report speaks of 'examination of abnormal unit and total prices'. So this was indeed a price justification on suspicion of abnormal price. For such a procedure a heightened duty to give reasons applies. The Council quotes its settled case law: 'Where the contracting authority deems it necessary to invite a tenderer to justify certain prices, the decision not to consider a price as abnormal must be supported by precise reasoning showing the reality, accuracy and relevance of the elements relied upon'. The reasoning 'two are generics, one is the original' fails on two levels. First: the two biosimilars are not generics. The distinction is both scientific and economic: a 'consensus information document' from the European Commission itself confirms that 'the price differences between biosimilar medicines and their reference medicines have not proved as substantial as those of the generic market'. A biosimilar costs more to produce than a classic generic — so the achievable price drop versus the original is smaller. The contracting authority admits a 'gross error' but minimises it as 'merely scientific'. Second: even without the error, the reasoning is too brief. Referring to 'generics versus original' without any explanation of the impact on the Infliximab price does not allow one to understand why a price difference of 80% (Sandoz €68.89 vs MSD €405.22) is accepted as normal. Nor does it permit verification that the two cheapest offers comply with the legal obligations (including labour costs and social legislation) that Article 36 itself mentions. The Council adds a procedural sting: 'The explanations produced ex post by the adverse and intervening parties to justify the normality of the prices in the present proceedings are belated and cannot remedy the lack of reasoning that affects the contested act'. Whatever the contracting authority and Sandoz now try to explain in the proceedings cannot fix the absent motivation. The award to Sandoz is suspended.
Why does this matter?
For pharmaceutical-sector authorities — and for any authority faced with large price spreads — this judgment is a warning. Anyone using Article 36 of the Royal Decree on Procurement to ask bidders to justify abnormal prices cannot then escape with a two-line conclusion in the report. The greater the price spread, the more detail your acceptance must contain: which elements you weighed, why they explain the gap, how you verified the offered price covers all costs and respects all legal obligations. A reference to 'these are different product categories' is not a justification — it is a hypothesis. And factual inaccuracy (generics vs biosimilars, classic vs biotechnological, originator vs follow-on) will haunt your motivation.
The lesson
If you decide after an Article 36 query that the prices offered are not abnormal, motivate per bidder, concretely, what justification was given and why you accepted it. Mention amounts, product nature (originator, biosimilar, generic, branded, ...), production costs where disclosed, and — explicitly — that the price covers all legal obligations (wage, social, environmental obligations, no sale at a loss). 'Justifications accepted' alone is not enough, even when confidentiality of bids is required. You can keep commercial details confidential but you must make the logic of your acceptance visible in the decision itself.
Ask yourself
Did you request a price justification under Article 36 of the Royal Decree of 18/04/2017? Write down for yourself: by how much does the lowest bid deviate from the average or estimate (%)? What concrete justification (cost components, scale advantages, technological differences, country of production, ...) did the bidder give? Did your decision record per bidder what was raised and why you accepted it? Did you explicitly check whether the price covers all legal obligations? If any answer is 'no', your decision is vulnerable to suspension — and ex post explanations before the Council will not save you.
About this database
The Council of State (Raad van State / Conseil d'État) is Belgium's supreme administrative court. In disputes over public procurement — from contract awards to tenderer exclusions — the Council of State is the final arbiter. The rulings in this database are summarised by TenderWolf in plain language, with practical lessons for tenderers and contracting authorities. View all rulings →